CEO insists agency still on course despite €1.18bn loss
Published 29/07/2011 | 05:00
NAMA posted a loss of €1.18bn last year after the value of its properties fell considerably below the prices paid in 2009.
On average, the agency paid 58pc less than the value of the loans it holds when it took them off the banks. The latest fall is in addition to this earlier drop.
NAMA revealed the loss as it published its first full-year results yesterday.
The losses are certain to heighten concerns that the bank set up to work through boom-era property loans and eventually return a profit to taxpayers is off course just one year into its 10-year life span.
However, NAMA chief executive Brendan McDonagh insisted last year's losses would not change his target of making a profit of €1bn over the life of the agency.
"We see no reason to change that," he said.
Yesterday's figures show NAMA made an operating profit of €305m in 2010.
But it was forced to book a loss for the year after suffering a €1.485bn fall in the value of value of property on its books.
"The fact that an impairment provision is taken does not necessarily mean the losses will ever materialise," Mr McDonagh added.
He admitted the fall in property values was worse than expected. In March, NAMA said it expected to take a €1bn hit on the values.
NAMA had finalised the sale of €3.9bn of property by the end of June, and said it made a profit on those deals.
However, Mr McDonagh revealed properties in Ireland were sold at a loss, but the overall figures were boosted by higher prices paid for UK assets, especially in London and the south east.
The accounts reveal the huge scale of NAMA activities.
NAMA paid €30.5bn to five banks for property loans with a face value of €70.2bn -- a discount of 58pc.
That breaks down into 11,500 individual loans linked to 850 developers, but a handful of big developers account for massive debts now owed to the agency.
This includes three developers who owe more than €2bn each, with another 12 each owing more than €1bn.
Receivers have been appointed to over 73 assets, and the agency has opted not to take 33 other assets into receivership.